Fashion seems to be the next big bet for all online retailers. While Flipkart has steadily expanded its ventures Myntra and Jabong, the country‚Äôs major offline retail major, retail giant Future Group is going to challenge them by taking over Koovs.com
Koovs runs an online retail store by the same name and has been operational for many years. Kishore Biyani, the promoter of Future Group is now making the bid for this company by offering $140 million for a 29.9% stake, through his company Future Lifestyle Fashions Limited (FLFL). The deal is subject to receiving the mandatory approvals.
The addition of Koovs to its stable definitely gives the Future Group a huge thrust since it has an ongoing business in the segment and has both online and offline fashion stores selling clothes for different segments, like women, men and children. Biyani would like to believe that the combined entity, once the acquisition it through, hopes to become the largest online fashion retailers.
That Future Group were indeed scouting for partnerships to expand their reach and spread their offerings was clear from the statements made by Biyani that they were discussions with many large companies, including with Amazon, Google and Flipkart-Walmart, and some leading investment companies like Alibaba, SoftBank and Tencent Holdings for possible collaborative efforts.
FLFL does not have any difficulty in funding this acquisition since the company had raised around $800 million from L. Chatterton Asia, a Singapore based equity investment firm. Its offline presence is formidable with 400 stores occupying a floor space of over 6 million square feet. Some of them are private branded stores like Brand Factory and Central and clothes and apparels of some 30 different brands are sold through these. Future Group as such has 2000 super markets across the country, under the BigBazaar umbrella seeing 500 million footfalls a year.
Trade is keenly watching what is going on with Myntra and Jabong with Walmart taking over Flipkart. They are going the reverse way by unveiling their plans to set up brick and mortar retail outlets to support the main online business they have been carrying on so far.